Consumer markets insights from PwC’s Global Crisis Survey 2019

PwC’s first-ever Global Crisis Survey: 2,084 senior executives in organizations of all sizes, in 25 industries and across 43 countries—with a total of 4,515 crises analyzed. We dug deeper into corporate crisis in the United States, learning from the personal experiences of over 140 executives and more than 450 crises.

We looked at the companies that self-identified as having emerged stronger from their worst crisis. What did these organizations do differently? What crucial preparedness steps did they take that led to their positive outcomes?

We then looked at how the consumer markets (CM) industry compared to global results. Here's what we found.

Crisis preparedness as a competitive advantage: How do CM organizations compare?

The Crisis Maturity score for the overall CM industry is 48.16. The CM industry results for each of the score elements are only marginally less than global averages in all areas.

Volume of crises

The volume of crises experienced by CM is slightly lower than the global average, with 65% of CM companies experiencing more than one in the last five years, compared to 69% globally.

The importance of preparing for crisis cannot be ignored—it’s not if, but when.

Top three high internal impacts

The three impacts felt most keenly by CM companies were in operations, finance and customer relations.

Compared to the global average, CM companies report experiencing more operational crises, including supply chain breakdowns, product failures and product integrity issues.

They also report more financial crises, which could originate from the operational crises. And when consumer products are hit by crisis, brand trust and public sentiment often weigh in the balance.

Consumers frequently speak with their wallets, which could explain the higher percentage attributed to financial repercussions of crises.

Organizational impacts, strengths and vulnerabilities

Compared to the global average, fewer CM companies reported experiencing a high impact on business partner or customer relationships after a crisis. We found this surprising, as we’d expect an unplanned event (such as an operational failure or supply chain disruption) to impact customer relationships within the industry more than in other industries.

Interestingly, brand reputation and trust were ranked as feeling one of the lowest impacts by those surveyed. Only 15% of consumer markets organizations indicated they experienced a significant impact on their brand reputation from a disruptive crisis. It’s important to note that it only takes one crisis to have an adverse effect on your brand.

Most vulnerable areas

As crisis specialists, we know that the potential damage of a crisis is not so much governed by the nature of the crisis as by how well it is handled once it arrives.

The highest vulnerability areas stated by CM executives include the ability to gather appropriate information quickly, and the ability to make timely and deliberate decisions. In an environment of consumer consciousness and the preponderance of viral social media, a timely response is critical.

How to build brand trust when crisis becomes normal

Understand that no one is immune

Ninety-five percent of CM respondents expect to experience a crisis. Their top predictions are competitive or marketplace disruption, cybercrime and operational failures.

Identify the most likely crises for your organization. Prepare and train your workforce on those scenarios to build muscle memory, so that you are primed regardless of the nature of the crisis. Use your corporate values as your north star to increase your team’s confidence in executing. Build a response plan that is authentic to your brand. Remember that transparency and authenticity key tenets of brand trust.

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Have a plan—and take it off the shelf

  • 27% of CM execs do not have a crisis response plan. Do you?

Of those that have plans, only 11% used them during a real-life crisis. Make yours crisis agnostic.

  • 43% felt overwhelmed by a recent crisis. Increase confidence by aligning effective crisis response to your values.

Just 9% review and test crisis plans regularly. Don’t make the same mistake.

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Focus on the team

  • 1/3 of CM companies have no executive owner for crisis
  • 21% have an owner in name only
  • 13% have crisis teams with defined roles and responsibilities

Your customers are watching and may base their buying and trust decisions on how you react in crisis. Have an executive crisis owner with significant experience and authority to direct your response.

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Get insight from the settling dust

Performing a root-cause analysis is key to understanding what works and what doesn’t in crisis. These lookbacks can be done after real crises, simulations or training exercises. Alarmingly, more than half of CM companies say they do not conduct any crisis simulations or exercises. Only 5% have a defined training schedule and incorporate lessons into processes. This is a significant area for improvement. Learning can make you stronger even when it’s business as usual, and can help your customers feel confident that you are responsible and reliable.

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Learn from those that have been there

  1. Allocate budget to crisis management—before it hits.
  2. Have a plan—and test it.
  3. Adopt a fact-based approach—and don’t neglect key stakeholders.
  4. Perform a root-cause analysis—and follow up.
  5. Act as a team—and hold to team values.

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Contact us

Steven J. Barr

Global Consumer Markets Leader, PwC US

Eric Shin

Consumer Markets Tax Leader, PwC US

Ron Kinghorn

Consumer Markets Advisory Leader, PwC US

Melissa Palmer

Consumer Markets Assurance Leader, PwC US

David Stainback

Partner, US Crisis Consulting Leader, PwC US

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